Several attackers have been shot dead in a clash with police during an incident involving a second van in the Spanish seaside town of Cambrils, south of Barcelona, Spanish media say.

It's not clear how the incident is linked to the van attack in Barcelona.

Islamic State has reportedly claimed responsibility for the terror attack, according to the Amaq news agency.

Three of those injured are Australians, including two men from Melbourne and a woman from Sydney.

Local newspaper La Vanguardia says all four attackers were killed after they crashed their van into a pedestrian zone - injuring five people. Explosive belts and firearms were recovered from the scene, it reports.

Reports suggest the van had been intercepted by a police patrol, and a chase ensued. The van crashed into a pedestrian area on the esplanade of the seaside town and over-turned.

A shootout with police followed.

Police warned local residents and tourists at nearby hotels to stay indoors: "If you're now in Cambrils, avoid going out. Stay home, stay safe," the region's civil defense agency said in a tweet.

TERROR IN BARCELONA

At least one Australian from NSW is reported to be in a serious condition. Foreign Minister Julie Bishop said two Victorians were waiting to seek medical attention for minor injuries, and the total number killed in the incident was 16.

This death toll is yet to be confirmed.

There were scenes of panic on the famous thoroughfare, with bodies strewn in the street.

Eyewitnesses said the van was travelling at speeds of up to 80km/h when it mounted the footpath, and then zig-zagged down the Las Ramblas promenade for up to 500m before it came to rest with a badly injured person crumpled near the front wheels.

Terrified tourists were seen fleeing as the van smashed its way through street furniture and pedestrians, in an attack chillingly similar to those in London this year, and in Nice in southern France a year ago.

Two men - a Spanish national and a Morroccan - have been arrested in relation to the attack but police said the driver of the van was still on the run.

Islamic State has claimed responsibility for the terror attack, according to the Amaq news agency.

TERROR ARRESTS

Following the attack, Spanish police distributed an image of Driss Oukabir, whose ID had been found in a second rental van believed to be the getaway vehicle.

The 28-year-old Catalan resident of Moroccan origin later handed himself in to police in Ripoll, about 100km from Barcelona. Oukabir claimed that his younger brother, Moussa Oukabir, 18, had stolen his documents.

Driss Oukabir, 28, was named by police as having rented the van used in the attack. He was the first to be arrested.

The second person arrested was a Spanish national born in the Spanish territory of Melilla in northern Morocco.

"It was clearly a terror attack, intended to kill as many people as possible," Josep Lluis Trapero, a senior police official, told a news conference this morning.

The arrests took place in the northern Catalan town of Ripoll, and in Alcanar, some200 kilometres south of Barcelona, the site of a gas explosion at a house earlier in the week.

Police suspect the explosion is linked to the van attack.

Trapero said the explosion left at least one person dead, and police suspected those in the house were "preparing an explosive device."

"It seems there was an accumulation of gas that generated the explosion," he said, without giving further details.

The town of Cambrillis, the site of an ongoing police operation, on the coastal road between Barcelona and Alcanar.

MANHUNT UNDERWAY

It was still not clear how many attackers were involved. In another incident, police shot dead a man who had driven a car into a police checkpoint on the outskirts of Barcelona.

Catalan police said at least two police were run over when a Ford Focus broke through a checkpoint.

Police say the officers suffered only minor injuries and didn't need to be hospitalised.

The van which crashed into a crowd in Barcelona. Picture: SuppliedSource:Supplied

The bomb squad attended the scene and there were conflicting reports about whether a second vehicle was used as a getaway.

Police searched shops and nearby streets, and set up roadblocks around the city.

While gunshots were reported in a nearby department store, police said there had been no exchange of fire.

AUSSIES CAUGHT UP IN TERROR

Foreign Minister Julie Bishop said a NSW woman was in a serious but stable condition.

"We know she is in a serious but stable condition, our consular staff will be at the hospital as soon as possible," she said.

Ms Bishop said two young men from Victoria had also been hurt.

"They have gone back to their hotel and will seek medical treatment in the morning," Ms Bishop said. "I'm not sure if they have injured or they just need to see a medical professional in the morning."

She said "there could be more" Australians injured.

"I ask all Australians in the vicinity to contact local authorities to let them know of their whereabouts and to contact their loved ones back in Australia," she said.

Ms Shaw ventured outside with her partner, but stayed close to the hotel."They were asking are you okay and what's going on? Because we're actually staying a couple of metres away from the Las Ramblas section. We turned on the TV and it was absolutely filled with all the news about the terror attack and we just found out from there."

"We went outside probably about an hour after we heard about everything. We had been watching the news for a while and they had been jumping from one person dead and then all of a sudden it was 13 people dead.

"We didn't really know what was going on and we went outside and there were people everywhere.

"There were police cars actually quite close to where we were so we thought it might be best to actually stay in our hotel.

"The hotel staff were recommending that nobody leave the hotel."

Ms Shaw said the mood was sombre.

"We had just gone down stairs to find out what was happening from the staff. The staff were at the door and they were recommending that nobody go outside because police were running past with big guns."

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Gil Van Der Venne from Melbourne, who was staying at Hotel Baguef, said it was an extremely distressing.

"It's a really scary situation when you're walking back from your day of sightseeing and you're deciding whether to have a drink out in Las Ramblas or walk back to your hotel room and we chose the latter," he told 3AW.

"Fifteen minutes later, you're looking over the balcony from the top of the roof top bar while you're having a drink and there it is, all happening in front of you.

"You hear the screaming, the mayhem, you look over the top and there are at least five bodies that I saw and unfortunately, I believe three of them, well they're still there now in body bags so you can imagine obviously they've passed. It's very, very scary. The place is still in lockdown."

Australian Susan McLean, who is in Barcelona, spoke with Sunrise by phone this morning.

"It was too close for comfort," she said. "I was in a shop doing some shopping and my husband, being a good husband, was standing out the front.

"I went out to get him because I want to show him something as I went out, there was a tidal wave of people running from Las Ramblas around the corner down our street.

"They were panicked, they were running for their lives.

"They were screaming, they were crying hysterically. Immediately we knew something terrible had happened. "

"It is night time now, it is 11:20 at night. We were ordered to stay inside and we were told after this that they are not wanting people to go into the street.

"The only sounds we've been hearing our sirens and a police helicopter, both of which have stopped now.

"They are still saying we should stay inside even though it believed the two suspects have been arrested. What they wouldn't want is everyone to leave their hotel and see what's going on."

'THE SPANIARDS WILL DEFEAT TERRORISM'

Spanish Prime Minister Mariano Rajoy said that they would use "maximum coordination to arrest the attackers, reinforce security and attend to all those affected."

On Twitter he added: "We are united to defeat terrorism. The Government of Catalonia, Barcelona and all the security forces are backed by the Government."

"The priority is to attend to those affected, detain the killers and restore normalcy. The Spaniards will defeat terrorism."

In a statement released on Twitter the Spanish royal family said, "They are murderers, nothing more than criminals who are not going to terrorize us. All of Spain is Barcelona. Las Ramblas will go back to being everyone's."

WORLD LEADERS RESPOND

World leaders were quick to condemn the terror attacks.

"Resolute with Spain in the fight to defeat terrorism we condemn the terrorist attack in Barcelona. Our love & prayers are with the victims," Australian Prime Minister Malcolm Turnbull said.

Resolute with Spain in the fight to defeat terrorism we condemn the terrorist attack in Barcelona. Our love & prayers are with the victims.

Theresa May condemned the "terrible" attack in which a speeding van struck pedestrians in Las Ramblas. The attack in Barcelona comes after similar vehicle attacks in London this year.

European Commission President Jean-Claude Juncker, meanwhile, said it was "with profound sorrow and anguish that I have learnt of the terrorist attack that has struck at the heart of Barcelona this afternoon."

He added: "This cowardly attack has deliberately targeted those enjoying life and sharing time with family and friends. We will never be cowed by such barbarism."

Michelle and I are thinking of the victims and their families in Barcelona. Americans will always stand with our Spanish friends. Un abrazo.

French President Emmanuel Macron tweeted Thursday evening: "All my thoughts and solidarity from France for the victims of the tragic attack in Barcelona. We will remain united and determined."

Nice Mayor Christian Estrosi, whose Mediterranean city lost 86 people in a truck attack during a Bastille Day fireworks display a little more than a year ago, announced that a special homage to Barcelona's victims would be held Friday.

Paris Mayor Anne Hidalgo, a Spanish native whose city has faced multiple Islamic extremist attacks in recent years, expressed her "sadness and indignation."

Spanish Prime Minister Mariano Rajoy tweeted: "In contact with all administrations. Priority: tend to the injured in Las Ramblas and facilitate the work of security forces."

The Spanish royal household said on Twitter: "They are murderers, nothing more than criminals who are not going to terrorise us. All of Spain is Barcelona. Las Ramblas will go back to being everyone's."

Barcelona Mayor Ada Colau said a minute of silence would be held on Friday in the city's main square "to show that we are not scared" following the van attack.

TERROR IN EUROPE

While Spain has faced domestic terror attacks from the ETA separatist group over the year, it has not had a major Islamist attack since the horrific train bombings in Madrid in 2004 which killed 191 people and injured 1841 more.

Spain has so far been spared the kind of extremist violence that has occurred in nearby France, Belgium and Germany.

Vehicles have been used in several terror attacks in Europe in recent years, including a jihadist massacre that claimed 86 lives in the French Riviera city of Nice.